Feds want airlines to pay more to bump passengers

If you've ever been bumped off a flight involuntarily, you know that getting a voucher for a future trip doesn't begin to make up for the inconvenience. Which is why proposed new federal rules have left airline passengers cheering in the narrow aisles. Passengers may soon be able to collect as much as $1,300 for their trouble.

My husband missed my brother's lovely lakeside wedding a few years ago after United Airlines bumped us off a flight that we'd reserved months in advance. I almost didn't make it either, until a man who was in first place on the waiting list gave his family's seats to me and my two-year-old -- the wedding's ring bearer -- after I broke down sobbing in the airport holding my $250 silk shantung bridesmaid dress.

Sadly, my story isn't unique. More passengers than ever are being bumped off flights without their consent. The number of travelers denied boarding in the first quarter of this year jumped 32% when compared with a similar period last year, according to government statistics.

Federal officials proposed new rules on Wednesday that they hope will push carriers to get a handle on what's known as "overbooking." The practice, while legal, has increased in recent years after airlines removed hundreds of airplanes from service during a down economy, causing load factors on the remaining flights to hit record highs.

"The compensation has not been keeping pace with inflation," said Bill Mosley, a spokesman for the Department of Transportation. "We thought that should be updated." And update they did.

The new proposal would increase the compensation carriers must provide passengers who are involuntarily bumped off of a flight from $400 to $650 if the airline finds a substitute flight that will arrive within two hours of the passenger's original domestic flight time, or within four hours for international flights.

The limits would increase from $800 to $1,300 if the substitute flight arrived later than two, or four, hours of the passenger's original flight times, respectively. These amounts would adjust for inflation every two years. Can you hear the collective "woo-hoo?"

The announcement follows a push by the DOT to crack down on airlines who do not comply with federal regulations that require them to notify passengers in writing that they are entitled to compensation when they are involuntarily bumped off of a flight.

This spring, the agency fined Southwest Airlines--which bumped more passengers than any U.S. carrier last year--$200,000 for violating these requirements.

The new overbooking limits were part of a package of consumer protections, including requiring carriers to disclose all fees when advertising a flight, prohibiting price increases after a ticket has been purchased, allowing passengers to make and cancel reservations within 24 hours without a penalty, and mandating timely notice of flight changes.

The new rules follow a push by the DOT to put a stop to long waits on the tarmac by requiring carriers to return to the gate if the wait for takeoff might exceed three hours. The rule, which went into effect in April, has already forced airlines to cancel flights.

"This is part of an overall effort to improve consumer protection across the industry," Mosley said. "It's not so much the volume of complaints, but the things people have been complaining about."

And more passengers have been griping about hidden charges that aren't disclosed when they're researching ticket prices. The requirements announced Wednesday seek to get a handle on this, by requiring carriers to disclose all fees and taxes. The DOT fined several carriers last month for failing to disclose the full price consumers must pay.

The airline industry, which has lost billions in the last decade, is likely to dispute the new rules.

"The ATA member airlines' shared goal is to provide a safe, efficient, reliable and economically viable air transportation system consistent with the expectations of their customers, employees and shareholders," said James C. May, president and chief executive of the Air Transport Assn., an industry trade group.

"Today's DOT notice of proposed rule-making will be evaluated against that standard, with a focus on minimizing potential passenger inconvenience," May said in a statement.

Federal officials will take comments on the proposed rule changes for 60 days and hope to release new regulations this fall, Mosley said.